J&J buys California pharma firm in deal worth up to $1B

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June 17, 2013 at 12:10 PM

A New Jersey pharmaceutical giant will spend up to $1 billion to boost its prostate cancer portfolio.

New Brunswick-based Johnson & Johnson said Monday it will purchase Aragon Pharmaceuticals Inc., a California-based drug company focused on developing treatments for hormone-dependent cancers. The sale includes $650 million in cash upfront, with a possibility of up to $350 million in future milestone payments.

Under the deal, Johnson & Johnson will take Aragon’s androgen receptor antagonist program. The rest of the company’s assets will be spun off into a new company, which J&J won’t own.

Aragon’s lead androgen receptor antagonist product is a treatment for castration-resistant prostate cancer. The drug candidate, known as ARN-509, is currently in Phase 2 development.

In a statement, Dr. Peter F. Lebowitz, global therapeutic area head for oncology at J&J’s Janssen Research & Development LLC, said the deal strengthens the company’s prostate cancer drug development portfolio. He said it complements Johnson & Johnson’s highly successful prostate cancer drug Zytiga, which had $344 million in sales during the first quarter of the year.

“Prostate cancer is one of our main areas of focus, and we are pleased to be adding ARN-509 to our portfolio,” Lebowitz said, in a press release.

The deal already has been approved by the boards of both J&J and Aragon, but is still subject to regulatory approval. Johnson & Johnson expects the deal to close in the third quarter of this year.